SECURITIES PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of July 2, 2018, by and between CleanSpark, Inc.,
a Nevada corporation, with headquarters located at 70 North Main Street, Suite 105, Bountiful, UT 84010 (the “Company”),
and Auctus Fund, LLC, a Delaware limited liability company, with its address at 545 Boylston Street, 2nd Floor, Boston,
MA 02116 (the “Buyer”).


 


WHEREAS:


 


A.                             
The Company and the Buyer are executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities
and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);


 


B.                             
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and
conditions set forth in this Agreement a 12% convertible note of the Company, in the
form attached hereto as Exhibit A, in the aggregate principal amount of up to US$550,000.00 (together with any note(s) issued in
replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”),
convertible into shares of common stock, $0.001 par value per share, of the Company
(the “Common Stock”), upon the terms and subject to the limitations and
conditions set forth in such Note.


 


C.                             
The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such
principal amount of Note as is set forth immediately below its name on the signature
pages hereto; and


 


NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:


 


1.                             
PURCHASE AND SALE OF NOTE.


 


a.           
Purchase of Note. On the Closing Date (as defined below), the Company shall issue
and sell to the Buyer and the Buyer agrees to purchase from the Company such principal
amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto, subject to the express terms
of the Note. In connection with the funding of the First Tranche (as defined herein) of the Note, the Company shall issue to Buyer
on the Closing Date, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”), as further
provided in the Note. The Returnable Shares shall be deemed earned in full as of the
Closing Date. In connection with the funding of the First Tranche of the Note, the
Company shall issue 100,000 shares of the Company’s common stock (the “Initial Commitment Shares”) to Buyer as
a commitment fee. If (i) the Second Market Price (as defined below) as calculated on December 30, 2018 (the “Make- Whole
Date”) is lower than the closing price of the Common Stock on July 2, 2018


 




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(the “First
Market Price”) and (ii) the Note has not been repaid in full by September 24, 2018, then the Company shall within two (2)
business days of the Buyer’s request, issue additional shares of its Common Stock to Buyer, equal to 25% of the Aggregate
Value (as defined below) divided by the Second Market Price, minus the number of the Initial
Commitment Shares (the result of which shall be referred to herein as the “Second Commitment Shares”). The Aggregate
Value shall mean 100,000 multiplied by the closing price of the Company’s common stock on the date of this Agreement. The
Second Market Price shall mean the closing price of the Company’s Common Stock on the Make-Whole Date. The Initial Commitment
Shares and the Second Commitment Shares shall collectively, in the aggregate, be referred to herein as the “Commitment Shares”.
The Second Commitment Shares, if required to be issued pursuant to this Agreement, shall be issued as provided in this Agreement,
provided, however, that in no event shall the Buyer be entitled to receive shares of
common stock in excess of the amount that would result in beneficial ownership by the Buyer and its affiliates of 4.99% of the
outstanding shares of common stock at that time (pursuant to the specific calculations of beneficial ownership as provided in the
Note). Accordingly, the Second Shares, if required to be issued pursuant to this Agreement, shall be issued in accordance with
such beneficial ownership limitations, and in successive tranches if required to comply with such beneficial ownership limitations
(each an “Additional Tranche”). The Company shall issue each Additional Tranche within two (2) business days of the
request by Buyer.


 


b.           
Form of Payment. On or around the Closing Date (as defined below), the Buyer shall
pay the purchase price of $225,000.00 (the “Purchase
Price”) for the first tranche of $225,000.00 under the Note (the “First Tranche”), by wire transfer of immediately
available funds, in accordance with the Company’s written wiring instructions,
against delivery of the Note, and (i) the Company shall deliver such duly executed
Note on behalf of the Company, to the Buyer. If the Buyer decides to pay, in their sole discretion, additional amounts (additional
tranches) under the Note, as further described in the Note, then such additional amounts shall be paid in accordance with the Company’s
written wiring instructions as well.


 


c.             
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto
set forth in Section 7 and Section 8 below, the date and time of the
issuance and sale of the First Tranche of the Note pursuant to this Agreement (the “Closing Date”) shall be
12:00 noon, Eastern Standard Time on or about July 2, 2018, or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing
Date at such location as may be agreed to by the parties.


 


2.                                 
REPRESENTATIONSANDWARRANTIESOFTHE BUYER. The Buyer represents and
warrants to the Company that:


 







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a.            Investment
Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon conversion
of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are
issuable (i) at Closing as Returnable Shares, (ii) on account of interest on the Note (iii) as a result of the
events described in Sections 1.3 and 1.4(i) of the Note or (iv) in payment of the Standard Liquidated Damages Amount (as
defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein
as the “Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and
not with a present view towards the public sale or distribution thereof, except
pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the
representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.


 


b.          
Accredited Investor Status. The Buyer is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).


c.           
Reliance on Exemptions. The Buyer understands that the Securities are being offered
and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein
in order to determine the availability of such exemptions and the eligibility of the
Buyer to acquire the Securities.


 


d.            
Information. The Buyer and its advisors, if any, have been, and for so long as the
Note remains outstanding will continue to be, furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors.
The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, afforded the
opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material
nonpublic information and will not disclose such information unless such information is disclosed to the
public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves
a significant degree of risk. The Buyer is not aware of any facts that may constitute
a breach of any of the Company's representations and warranties made herein.


 


e.            
Governmental Review. The Buyer understands
that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation
or endorsement of the Securities.


 




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f.            
Transfer or Re-sale. The Buyer understands that (i) the
sale or re-sale of the Securities has not been and is not being registered under
the 1933 Act or any applicable state securities laws, and the Securities may not be
transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the
Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred
may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the
Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities
are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the
Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate
transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may
be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities
under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under
any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions
of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the
Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event
that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant
to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion
to the Company, the Company shall pay to the Buyer
liquidated damages of five percent (5%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note,
prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If
the Buyer elects to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the
Conversion Price (as defined in the Note) at the time of payment.


 


g.           
Legends. The Buyer understands that the Note and, until such time as the
Returnable Shares and/or Conversion Shares have been registered under the 1933
Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Returnable Shares and/or Conversion Shares may bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer
of the certificates for such Securities):


 




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“NEITHER THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the
holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold
pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then
be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without
registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer
agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, in compliance
with applicable prospectus delivery requirements, if any. In the event that the Company
does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption
from registration, such as Rule


144 or Regulation S, at the Deadline, it will be considered
an Event of Default pursuant to Section 3.2 of the Note.


 


h.           
Authorization; Enforcement. This Agreement has been duly and validly authorized.
This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding
agreement of the Buyer enforceable in accordance with its terms.


 




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i.          
Residency. The Buyer is a resident of the jurisdiction set forth in the preamble.


 


3.                                 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the Buyer, unless stated to the contrary
in the Company’s SEC Documents, that:


 


a.           
Organization and Qualification. The Company and each of its Subsidiaries (as defined
below), if any, is a corporation duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate
its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Company and each
of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in
which its ownership or use of property or the nature of the business conducted by it
makes such qualification necessary except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect
on the business, operations, assets, financial condition or prospects of the Company
or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the
agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or
other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other
ownership interest.


 


b.           
Authorization; Enforcement. (i) The Company has all requisite corporate power and
authority to enter into and perform this Agreement, the Note and to consummate the transactions contemplated hereby and thereby
and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement,
the Note by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including without limitation, the issuance of the Note and the issuance of the
Returnable Shares and the issuance and reservation of the Returnable Shares and Conversion Shares issuable upon conversion
or exercise thereof) have been duly authorized by the Company’s Board of Directors and no further consent or authorization
of the Company, its Board of Directors, or its shareholders is required, (iii) this
Agreement has been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Agreement and the
other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and
upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms.


 







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c.             
Capitalization. As of the date hereof, the authorized capital stock of the Company,
and shares issued and outstanding, is as set forth in the Company’s
most recent periodic report filed with the SEC. Except as disclosed in the SEC Documents,
no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant
to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,269,231
shares are reserved for issuance upon conversion of the Note. All of such outstanding shares of capital stock are, or upon issuance
will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the shareholders
of the Company or any liens or encumbrances imposed through the actions or failure
to act of the Company. Except as disclosed in the SEC Documents, as of the effective
date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Note, Returnable Shares, or the Conversion
Shares. The Company has filed in its SEC Documents true and correct copies of the
Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”),
the Company’s By-laws, as in effect on the
date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Common Stock of the Company and the material rights of the holders
thereof in respect thereto. The Company shall provide the Buyer with a written update
of this representation signed by the Company’s Chief Executive on behalf of the
Company as of the Closing Date.


 


d.            
Issuance of Shares. The issuance of the Note
is duly authorized and, upon issuance in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof.
The Returnable Shares and Conversion Shares are duly authorized and the Conversion Shares are reserved for issuance and, upon conversion
of the Note in accordance with its respective terms, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the
issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will
not impose personal liability upon the holder thereof.


 


e.          
Acknowledgment of Dilution. The Company understands and acknowledges the
potentially dilutive effect to the Common Stock upon the issuance of the Returnable
Shares and Conversion Shares upon conversion of the Note. The Company further acknowledges
that its obligation to issue Returnable Shares and Conversion
Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute
and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders
of the Company.


 




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f.           
No Conflicts. The execution, delivery and performance of this Agreement and the Note
by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Returnable Shares
and the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of
any provision of the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations
to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in
the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Certificate
of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and
no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under,
and neither the Company nor any of its Subsidiaries has taken any action or failed
to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company
or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have
a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be
conducted so long as the Buyer owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required
to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory
agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its
obligations under this Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance
with the terms hereof and to issue the Returnable Shares and Conversion Shares upon conversion of the Note. All consents, authorizations,
orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained
or effected on or prior to the date hereof. The Company is not in violation of the


 




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listing requirements
of the Over-the-Counter Bulletin Board (the “OTCBB”), the OTCQB or any similar quotation system, and does not reasonably
anticipate that the Common Stock will be delisted by the OTCBB, the OTCQB or any similar quotation system, in the foreseeable future
nor are the Company's securities “chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 


g.            
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated
by reference therein, being hereinafter referred to herein as the (“SEC Documents”).
The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date
hereof). As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to March 31, 2018, and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually
or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to
the reporting requirements of the 1934 Act. For the
avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s
Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this
Section 3(g).


 




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h.           
Absence of Certain Changes. Since March 31, 2018, except as reported in the SEC Documents,
there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties,
operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.


 


i.           
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries,
or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete
list and summary description of any pending or, to the knowledge of the Company, threatened
proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.


 


j.          
Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses
the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary
to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the
future). Except as disclosed in the SEC Documents, there is no claim or action by any person pertaining to, or proceeding
pending, or to the Company’s knowledge threatened, which challenges the right
of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); to the best
of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes
do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and each of its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.


 


k.               
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries
is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s
officers has or is expected to have a Material Adverse Effect.


 


l.             
Tax Status. The Company and each of its Subsidiaries has made or filed all federal,
state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its Subsidiaries has set aside


 




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on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any
foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.


 


		m.	[INTENTIONALLY OMITTED].



 


n.             
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries
set forth in this Agreement and provided to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions
contemplated hereby is true and correct in all material respects and the Company has not omitted to state any material fact necessary
in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading.
No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the
1933 Act).


 


o.    
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges
and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers
with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions contemplated
hereby and any statement made by the Buyer or any of its respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’ purchase
of the Securities. The Company further represents to the Buyer that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation
of the Company and its representatives.


 


p.          
No Integrated Offering. Neither the Company,
nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in
any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act
of the issuance of the Securities to the Buyer. The issuance of the Securities to the
Buyer will not be integrated
with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.


 




    	 	11	 



    	 



    




 


		q.	[INTENTIONALLY OMITTED]



 


r.           
Permits; Compliance. The Company and each of its Subsidiaries is in possession of
all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals
and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively,
the “Company Permits”), and there is no action pending or, to the knowledge
of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the
Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since March 31, 2018, neither the
Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations
of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations
would not have a Material Adverse Effect.


 


		s.	Environmental Matters.



 


(i) 
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries
or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material
into the environment, actions, activities, circumstances, conditions, events, incidents,
or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the
Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or,
to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous
substances or wastes (collectively, “Hazardous Materials”) into the environment,
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.





 




    	 	12	 



    	 



    

 


(ii) 
Other than those that are or were stored, used or disposed of in compliance with applicable
law, no Hazardous Materials are contained on or about any real property currently
owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real
property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased
or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’
business.


 


(iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicable law.


 


t.               
Title to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries
have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned
by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances
and defects or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company
and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material
Adverse Effect.


 


u.           
Internal Accounting Controls. Except as disclosed in the
SEC Documents the Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access
to assets is permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.


 


v.              
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor
any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of
his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or employee.


 


		w.	[INTENTIONALLY OMITTED].



 


x.          
No Investment Company. The Company is not, and upon the issuance and sale of the
Securities as contemplated by this Agreement will not be an “investment
company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company
is not controlled by an Investment Company.


 




    	 	13	 



    	 



    




 


y.         
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent
and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to
directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.


 


z.      
Bad Actor. No officer or director of the Company would be disqualified under Rule
506(d) of the Securities Act as amended on the
basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance Guide
published by the SEC.


 


aa.
Shell Status. The Company represents that it is not a “shell” issuer and has never been a “shell”
issuer, or that if it previously has been a “shell” issuer that at least twelve (12) months have passed since the Company
has reported Form 10 type information indicating that it is no longer a “shell” issuer. Further, the Company will instruct
its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of the Returnable Shares and/or Conversion Shares
or (ii) accept such opinion from Holder’s counsel.


 


bb.
No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


cc.
Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or
indirectly, any action designed to cause or to result, or that could reasonably be
expected to cause or result, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed
to pay to any person any compensation for soliciting another to purchase any other securities of the Company.


 


dd. Sarbanes-Oxley
Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the
date hereof.


 




    	 	14	 



    	 



    




ee.
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees
are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933
Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such
officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company
or any such Subsidiary. To the knowledge of the Company, no executive officer or other
key employee of the Company or any of its Subsidiaries is, or is now expected to be,
in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer or other key employee (as the case may be) does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.


 


ff.
Due Diligence Questionnaire. The Company hereby represents and warrants to Buyer that all of the information furnished by
the Company to Holder on or around the date hereof, pursuant to the due diligence questionnaire form requested by Holder, is true
and correct in all material respects as of the date hereof.


 


gg.
Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the
representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer
pursuant to this Agreement and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay to
the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock
at the option of the Company, until such breach is cured. If the Company elects to
pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price at the
time of payment.


 


		4.	COVENANTS.



 


a.            
Best Efforts. The parties shall use their commercially reasonable best efforts to
satisfy timely each of the conditions described in Section 7 and 8 of this Agreement.


 




    	 	15	 



    	 



    

 


		b.	[INTENTIONALLY OMITTED].



 


c.            
Use of Proceeds. The Company shall use the proceeds from the sale of the Note for
working capital and other general corporate purposes and shall not, directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership, enterprise or other person (except in connection with its currently existing
direct or indirect Subsidiaries).


 


		d.	[INTENTIONALLY OMITTED].



 


e.             
Expenses. At Closing, the Company’s will reimburse Buyer’s legal expenses
of $4,000.00 which shall be considered a non-refundable, non-accountable sum.


 


f.             Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers,
assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC,
a copy of its Annual Report on Form 10-K its Quarterly Reports on Form 10- Q and any Current Reports on Form 8-K; (ii) within
one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii)
contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other
information the Company makes available or gives to such shareholders. For the
avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above
via a recognized wire service shall satisfy the delivery requirements of this
Section 4(f).


 


g.          
Listing. The Company shall promptly secure the
listing of the Returnable Shares and Conversion Shares upon each national securities exchange or automated quotation system,
if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns
any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Returnable
Shares and Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the
Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB, OTCQB or any equivalent replacement
exchange, the Nasdaq National Market (“Nasdaq”), the
Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE MKT
and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the
Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The
Company shall promptly provide to the Buyer copies of any material notices it receives from the OTCBB, OTCQB and any other
exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock
for listing on such exchanges and quotation systems. The Company shall pay any and all fees and expenses in connection with satisfying
its obligation under this Section 4(g).


 




    	 	16	 



    	 



    

 


h.          
Corporate Existence. So long as the Buyer beneficially owns any Note, the Company
shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the
event of a merger or consolidation or sale of all or substantially all of the Company’s
assets, where the surviving or successor entity in such transaction (i) assumes the Company’s
obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCBB, OTCQB, OTC Pink, the Nasdaq National Market, the Nasdaq Small
Cap Market, the New York Stock Exchange, or the NYSE MKT.


 


i.             
No Integration. The Company shall not make any offers or sales of any security (other
than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under
the 1933 Act or cause the offering of the Securities to be integrated with any other
offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.


 


j.              
Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note,
the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting
requirements of the 1934 Act.


 


k.          
Trading Activities. Neither the Buyer nor its affiliates has an open short position
(or other hedging or similar transactions) in the common stock of the Company and the Buyer agree that it shall not, and that it
will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the
common stock of the Company.


 


		l.	[INTENTIONALLY OMITTED].



 


m.       
Legal Counsel Opinions. Upon the request of the Buyer from to time to time, the Company
shall be responsible (at the Buyers cost) for promptly supplying to the Company’s transfer agent and the Buyer a customary
legal opinion letter of its counsel (the “Legal Counsel Opinion”) to the effect that the sale of Returnable Shares
and Conversion Shares by the Buyer or its affiliates, successors and assigns is exempt from the
registration requirements of the 1933 Act pursuant to Rule 144 (provided the
requirements of Rule 144 are satisfied and provided the Returnable Shares and Conversion
Shares are not then registered under the 1933 Act for resale pursuant to an effective
registration statement). Should the Company’s legal counsel fail for any reason to issue the Legal Counsel Opinion, the Buyer
may (at the Company’s cost) secure another legal counsel to issue the Legal Counsel Opinion, and the
Company will instruct its transfer agent to accept such opinion.


 


		n.	[Intentionally Omitted].



 




    	 	17	 



    	 



    

 


o.           
Breach of Covenants. The Company agrees that if the Company breaches any of the covenants
set forth in this Section 4, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of Default under Section 3.4 of the Note, the Company shall pay to the Buyer the
Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option of the Buyer, until such breach is
cured, or with respect to Section 4(d) above, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash
or shares of Common Stock, at the option of the Buyer, upon each violation of such
provision. If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be
issued at the Conversion Price at the time of payment.


 


		5.	[Intentionally Omitted].



 


6.                              
Transfer Agent Instructions. The Company shall issue irrevocable instructions to
its transfer agent to issue certificates, registered in the name of the Buyer or its
nominee, for the Returnable Shares and Conversion Shares in such amounts as specified from time to time by the Buyer to the
Company upon conversion of the Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).
In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date
of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the
Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Returnable
Shares and Conversion Shares under the 1933 Act or the date on which the Returnable Shares and Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all
such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i)
no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section, and stop transfer instructions
to give effect to Section 2(f) hereof (in the case of the Returnable Shares and Conversion
Shares, prior to registration of the Returnable Shares and Conversion Shares under the 1933
Act or the date on which the Returnable Shares and Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately sold),
will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement and the Note;
(ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or
issuing)(electronically or in certificated form) any certificate for Returnable Shares and Conversion Shares to be issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will
not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing)
any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Returnable


 




    	 	18	 



    	 



    

 


Shares and Conversion
Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement.
Nothing in this Section shall affect in any way the Buyer’s obligations and agreement
set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities.
If the Buyer provides the Company, at the cost of the Company, with (i) an opinion
of counsel in form, substance and scope customary for opinions in comparable transactions, to the
effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale
or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144,
the Company shall permit the transfer, and, in the case of the Returnable Shares and Conversion Shares, promptly instruct its transfer
agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the
Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this Section,
that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.


 


7.                                 
CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of
the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may
be waived by the Company at any time in its sole discretion:


 


a.           
The Buyer shall have executed
this Agreement and delivered the same to the Company.


 


b.           
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.


 


c.           
The representations and warranties of the Buyer shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties
that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or
prior to the Closing Date.


 


d.           
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.


 




    	 	19	 



    	 



    




 


8.                                  
CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation
of the Buyer hereunder to purchase the Note at the Closing is subject to the satisfaction,
at or before the Closing Date of each of the following
conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in
its sole discretion:


 


a.           
The Company shall have executed this Agreement and delivered the same to the Buyer.


 


b.          
The Company shall have delivered to the Buyer the duly executed Note (in such denominations
as the Buyer shall request) and in accordance with Section 1(b) above.


 


c.             
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest
of the Buyer, shall have been delivered to and acknowledged in writing by the
Company’s Transfer Agent.


 


d.           
The representations and warranties of the Company
shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time
(except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Buyer shall have
received a certificate or certificates, executed by the chief executive officer of
the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested
by the Buyer including, but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws
and Board of Directors’ resolutions relating to the transactions contemplated hereby.


 


e.            
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any
of the transactions contemplated by this Agreement.


 


f.           
No event shall have occurred which could reasonably be expected to have a Material Adverse
Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the
Company to be timely in its 1934 Act reporting obligations.


 




    	 	20	 



    	 



    

 


g.          
The Returnable Shares and Conversion Shares shall have been authorized for quotation on
the OTCBB, OTCQB or any similar quotation system and trading in the Common Stock on the OTCBB,
OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTCBB,
OTCQB or any similar quotation system.


 


h.         
The Buyer shall have received
an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.


 


i.         
The Buyer shall have received the amount of Returnable Shares, issued as of the Closing
Date.


 


		9.	GOVERNING LAW; MISCELLANEOUS.



 


a.           
Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement, the Note or any other agreement, certificate, instrument or document
contemplated hereby shall be brought only in the state courts or federal courts located
in the Commonwealth of Massachusetts. The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.
Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any
other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.


 







    	 	21	 



    	 



    

 


b.           
Removal of Restrictive Legends. In the event that Purchaser has any shares of the
Company’s Common Stock bearing any restrictive legends, and Purchaser, through its counsel or other representatives,
submits to the Transfer Agent any such shares
for the removal of the restrictive legends thereon in connection with a sale of such shares pursuant to any exemption to the registration
requirements under the Securities Act, and the Company and or its counsel refuses or fails for any reason (except to the extent
that such refusal or failure is based solely on applicable law that would prevent the removal of such restrictive legends) to render
an opinion of counsel or any other documents or certificates required for the removal of the restrictive legends, then the Company
hereby agrees and acknowledges that the Purchaser is hereby irrevocably and expressly authorized to have counsel to the Purchaser
render any and all opinions and other certificates or instruments which may be required for purposes of removing such restrictive
legends, and the Company hereby irrevocably authorizes and directs the Transfer Agent to, without any further confirmation or instructions
from the Company, issue any such shares without restrictive legends as instructed by the Purchaser, and surrender to a common carrier
for overnight delivery to the address as specified by the Purchaser, certificates, registered in the name of the Purchaser or its
designees, representing the shares of Common Stock to which the Purchaser is entitled, without any restrictive legends and otherwise
freely transferable on the books and records of the Company.


 


c.              
Filing Requirements. From the date of this Agreement until the Notes are no longer
outstanding, the Company will timely and voluntarily comply with all reporting requirements that are applicable to an issuer with
a class of shares registered pursuant to Section 12(g) of the 1934 Act, whether or
not the Company is then subject to such reporting requirements, and comply with all requirements related to any registration statement
filed pursuant to this Agreement. The Company will use reasonable efforts not to take any action or file any document (whether
or not permitted by the 1933 Act or the 1934 Act or the
rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations
under said acts until the Notes are no longer outstanding. The Company will maintain the quotation or listing of its Common Stock
on the OTCBB, OTCQB, and OTC Pink, NYSE, or NASDAQ Stock Market (whichever of the
foregoing is at the time the principal trading exchange or market for the Common Stock (the “Principal Market”),
and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the
Principal Market, as applicable. The Company will provide Purchaser with copies of all notices it receives notifying the Company
of the threatened and actual delisting of the Common Stock from any Principal Market. As of the date of this Agreement and the
Closing Date, the OTC Pink, is the Principal Market. Until the Note is no longer outstanding, the Company will continue the listing
or quotation of the Common Stock on a Principal Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Principal Market.


 


d.             
144 Default. In the event commencing twelve (12) months after the Closing Date and
ending twenty-four (24) months thereafter, the Purchaser is not permitted to resell any of the Conversion Shares without any restrictive
legend or if such sales are permitted but subject to volume limitations or further restrictions on resale as a result of the
unavailability to Subscriber of Rule 144(b)(1)(i) under


 




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the 1933 Act or any
successor rule (a “144 Default”), for any reason except for Purchasers’ status as an Affiliate or “control
person” of the Company, or as a result of a change in current applicable securities laws, then the Company shall pay such
Purchaser as liquidated damages and not as a penalty an amount equal to two percent (2%) of the value of Conversion Shares (based
on the closing sale of the Common Stock) subject to such 144 Default during the pendency
of the 144 Default of each thirty day period thereafter (or portion thereof).


 


e.              
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist
upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage
of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that
may be brought by the Purchaser in order to enforce any right or remedy under the Note. Notwithstanding any provision to the contrary
contained in herein or under the Note, it is expressly agreed and provided that the total liability of the Company under the Note
for payments in the nature of interest shall not exceed the maximum lawful rate authorized
under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any
rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that
the Company may be obligated to pay under the Note or herein exceed such Maximum Rate.
It is agreed that if the maximum contract rate of interest allowed by law and applicable
to the Note is increased or decreased by statute or any official governmental action
subsequent to the date hereof, the new maximum contract rate of interest allowed by
law will be the Maximum Rate applicable to the Note from the effective date forward, unless such application is precluded by applicable
law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the
Purchaser with respect to indebtedness evidenced by the Note, such excess shall be applied by the
Purchaser to the unpaid principal balance of any such indebtedness or be refunded
to the Company, the manner of handling such excess to be at the Purchaser’s election.


 


f.      
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall constitute one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.
This Agreement, once executed by a party, may be delivered to the other party hereto
by facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.


 


g.           
Construction; Headings. This Agreement shall be deemed to be jointly drafted by the
Company and the Buyer and shall not be construed against any person as the drafter hereof. The headings of this Agreement
are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.


 


h.        
Severability. In the event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative
to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.


 




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i.          
Entire Agreement; Amendments. This Agreement, the
Note and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest
of the Buyer.


 


j.           
Notices. All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier
service with charges prepaid, or (iv) transmitted by hand delivery, telegram, email, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by email or facsimile,
with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered
on a business day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a business day during normal business hours where
such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:


 


If to the
Company, to:


 


CleanSpark, Inc.


70 North Main Street, Suite 105


Bountiful, UT 84010


E-mail: info@cleanspark.com


If to the Holder:


Auctus Fund, LLC


545 Boylston Street, 2nd Floor Boston, MA 02116


Attn: Lou Posner Facsimile:(617)532-6420


 




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With a copy
to (which copy shall not constitute notice): Legal & Compliance, LLC


330 Clematis Street, Ste. 217


West Palm Beach, FL 33401 Attn: Chad
Friend, Esq., LL.M.


E-mail: CFriend@LegalAndCompliance.com


 


Each party shall provide notice to the other party
of any change in address.


 


k.          
Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and assigns. Neither the Company
nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases
Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the
1934 Act, without the consent of the Company.


 


l.         
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.


 


m.             
Survival. The representations and warranties of the
Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder not withstanding
any due diligence investigation conducted by or on behalf of the Buyer. The Company
agrees to indemnify and hold harmless the Buyer and all their officers, directors,
employees and agents for loss or damage arising as a result of or related to any breach or alleged breach by the Company of any
of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are incurred.


 


n Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.


 


o.       
No Strict Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.


 




    	 	25	 



    	 



    

 


p.              
Remedies. The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement
will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the
provisions of this Agreement, that the Buyer shall be entitled, in addition
to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without
the necessity of showing economic loss and without any bond or other security being required.


 


q.      
Publicity. The Company, and the Buyer shall have the right to review a reasonable
period of time before issuance of any press releases, SEC, OTCQB or FINRA filings, or any other public statements with respect
to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the
Buyer, to make any press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions
as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such
press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).


 


r.                
Securities Laws Disclosure. The Company shall comply with applicable securities laws
by filing a Current Report on Form 8-K, within four (4) Trading Days following the date hereof, disclosing all the material terms
of the transactions contemplated hereby, if the Company deems the transactions contemplated hereby to constitute material non-
public information.


 


s.         
Indemnification. In consideration of the Buyer’s execution and delivery of
this Agreement and acquiring the Securities hereunder, and in addition to all of the Company’s other obligations under this
Agreement or the Note, the Company shall defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any of the foregoing persons’ agents or other
representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a
result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby,


(b) any breach of any
covenant, agreement or obligation of the Company contained in this Agreement or the Note or any other agreement, certificate, instrument
or document contemplated hereby or thereby or (c) any cause of action, suit or claim


 




    	 	26	 



    	 



    

 


brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising
out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities,
or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated
by this Agreement. To the extent that the foregoing undertaking by the Company may
be unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law


 


 


 


 


 


 


 


 


 


 


 


[signature page follows]


 




    	 	27	 



    	 



    







IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


 


CLEANSPARK, INC.


 



By: /s/
Matthew Schultz


Name: Matthew Schultz



Title: Chief Executive Officer


 


 





Auctus Fund, LLC


 


 


By: /s/
Lou Posner


Name: Lou Posner


Title: Managing
Director 


 


 





AGGREGATE SUBSCRIPTION AMOUNT:


 


	Aggregate Principal Amount of Note:	US$550,000.00
	 	 
	Aggregate Purchase Price:	US$550,000.00*


 


 





*The
purchase price of $225,000.00, relating to the first tranche of $225,000.00, shall be paid within a reasonable amount of time after
the full execution of the Note and related transaction documents. Additional tranches may be funded by the Buyer, in Buyer’s
sole discretion, in accordance with the terms of the Note.


 








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